China's Foreign Military Relations

China sold US$800 million worth of arms and military equipment to a variety
of nations in 2002, making it the world’s fifth largest arms supplier
after the United States, United Kingdom, Russia, and France. Among its principal
clients have been Algeria, Egypt, Iran, Kuwait, Pakistan, and Yemen. China also
provides military assistance to other countries, such as Fiji, Papua New Guinea,
Tonga, and Vanuatu.

The China North Industries Group Corporation (CNGC, often called NORINCO),
China’s main defense producer, has some 100 joint ventures and more than
80 overseas offices and branches in 30 countries and regions involved in military
and dual-use technology production and sales. Further, China is also a major
arms buyer, mostly naval and air force equipment from Russia. In 2004 China
gave unprecedented access to senior foreign military officers at a military
demonstration in Henan Province. Officers from 15 Asian nations and Russia were
present. In 2005 China and Russia held joint eight-day “Peace Mission
2005" military maneuvers near Vladisvostok and in Shandong Province and
nearby waters. Air, land, and amphibious exercises were held.

China is a member of the Shanghai Cooperation Organization (SCO), a joint effort
with Russia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan. The SCO was
established as the Shanghai Five when the partners signed agreements on strengthening
mutual trust in military fields in border areas in 1996 and on mutual reduction
of military forces in border areas in 1997. After the September 11, 2001, terrorist
attacks on the United States and the entry of U.S. and North Atlantic Treaty
Organization (NATO) forces into Central Asia, the SCO was formed and members
began to hold joint counterterrorism military exercises.

In 2004 the SCO initiated a regional antiterrorism structure to crack down
on various transnational terrorist and criminal activities. China also has held
joint naval and counterterrorism exercises with Pakistan. The naval exercise,
which occurred in the East China Sea, was the first such drill with a foreign
counterpart, as Chinese sources put it, “in a non-traditional security
field.” The antiterrorism exercise, which was held in Xinjiang Uygur Autonomous
Region, involved border guards from both sides.